Colorado Governor John Hickenlooper signed into law a sales-and-use-tax exemption bill for spaceflight property that has long been considered a hindrance to aerospace business growth in the state at the 30th Annual Space Symposium.

Hickenlooper was flanked by Colorado aerospace, regional economic development leaders and House Speaker Mark Ferrandino, D-Denver — who co-sponsored the legislation with House Minority Leader Brian DelGrosso, R-Loveland — at The Broadmoor in Colorado Springs for the signing ceremony Tuesday.

Colorado, which boasts the third-largest aerospace economy in the nation, had been losing ground to its competitor states of California and Florida, which already have these exemptions in place. Many local companies were avoiding storage of expensive satellite or spaceflight-related equipment in the state because of this now-exempted tax.

“This made no sense to any of us,” Hickenlooper said about the bipartisan measure to a large gathering of stakeholders and media.

The idea for the bill came from Longmont-based DigitalGlobe — a leading geospatial and earth imagery company.

“What was happening was DigitalGlobe was getting double taxed,” said Jay Lindell, aerospace champion for the Colorado Office of Economic Development and International Trade.

Boulder-based Ball Aerospace & Technologies Corp. assembles many of DigitalGlobe’s satellites, including its latest WorldView-3 satellite, which led to the double taxation situation.

“They would get taxed the by whatever state each part was built in and then taxed again here in Colorado,” Lindell said.

“It really just puts us on a level playing field with other states’ existing tax exemptions,” he said.

As I reported in February, Colorado punches above its weight, employing the third-most aerospace-related workers, behind California and Florida but ahead of Texas and Arizona. Colorado had been the only top-five aerospace state without a sales-and-use-tax exemption.

The bill is expected to decrease tax revenue for the state by about $74,000 in the 2014-15 fiscal year and more than $77,000 for fiscal 2015-16.

Ferrandino addressed the crowd, saying he loves crunching the fiscal note numbers, and “this bill was a no-brainer.”

The bill was supported by Lockheed Martin Space Systems, Sierra Nevada Corp.’s Space Systems and many other Colorado companies, and was lobbied for by the Colorado Association of Commerce & Industry (CACI).

“This is a monumental piece of legislation,” said Loren Furman of the Colorado Association of Commerce & Industry. “It is very pro-business legislation.”

It is refreshing, seeing Democrats lowering taxes to stimulate activity. Then you’ve got Ferrandino excitedly cruching his numbers and telling how much less the state will take in. So I really don’t get why they are doing it. If it stimulates activity, then it will produce revenue to the state in many more forms. Someone must be thinking outside the box, but it isn’t reported here.

windbourne

Gene, you obviously never had economics at the university.

GenePH

Windbourne, tell me why Ferrandino thinks this is a good thing if all he notes are the decreased revenue to the state from sales and use taxes. What does he think “business friendly” means?

President Ronald Reagan lowered marginal income tax rates and the net effect was a huge increase in revenue to the government. He didn’t just look at the revenue to the government based on past history. In other words, changing a tax rate effects the way people and business operate.

By stimulating business activity, the government should benefit as well as private business. Ferrandino is hopefully not the pencil-neck he appears in this article.

David joined The Denver Post in 1999, his second go-round in the Mile High City. Since then he’s covered a variety of topics – from human services to consumer affairs – most always with an investigative bent. Currently he does investigations and banking.